Financial Literacy and Members' Investment Decisions
A Case of Muungano Kikavu Chini Savings and Credit Cooperative Societies in Hai District, Tanzania.
DOI:
https://doi.org/10.58547/tkhecb93Keywords:
Financial Literacy, Members' Investment decision, Financial Inclusion, SACCOS, TanzaniaAbstract
Saving and Credit Cooperative Societies (SACCOS) play a crucial role in advancing financial inclusion and facilitating investment among low- and middle-income populations in Tanzania. However, the extent to which members’ financial literacy influences their investment decisions within these institutions remains inadequately documented. Guided by Dual Process Theory and the Theory of Planned Behaviour, this study examined the effects of financial knowledge, financial attitude and financial behaviour on investment decisions among members of Muungano Kikavu Chini SACCOS in Hai District. A cross-sectional design was employed, involving 220 respondents selected through purposive and simple random sampling. Data were collected using structured questionnaires, interviews and documentary reviews, and analysed through binary logistic regression complemented by thematic analysis. The results show that financial knowledge and financial behaviour have a positive and statistically significant influence on members’ investment decisions, whereas financial attitude exhibits a positive but insignificant effect. These findings suggest that, while favourable perceptions toward investment exist, actual investment behaviour is primarily shaped by members’ understanding of financial concepts and their ability to consistently practise sound financial habits. Qualitative insights further illustrate that socio-economic characteristics, including age, gender and economic activity, interact with literacy levels to shape investment patterns. The study contributes new empirical evidence on behavioural determinants of investment choices within the cooperative sector, highlighting the importance of strengthening financial knowledge and promoting disciplined financial behaviour. It concludes that targeted financial education, behaviour-enhancing interventions and context-appropriate financial products are essential for improving investment participation and deepening financial inclusion among SACCOS members.
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Copyright (c) 2025 Dr. Richard Ibrahim Msuya, PhD., Dr. NeemaLucy John, PhD, Karen Archibald Temu
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